Home loans with rental income

[Archer]

Quick question - trying to get pre-qualified for a loan so I know the ballpark the banks think I can afford. So in your experience, what percentage (if any) of rental income will banks allow you to put into your gross income? And what about if part of that rental would be from my current primary residence (ie when I move out I'll rent that out too)? I'm pretty sure my bank told me a year or two ago they'll take 50% of future rental, and 75% of current, but now I've spoken with another institution and they claim 0% future, 50% current.

 

[Other Pineapple Smurf]

The rental market has changed a lot and banks lending criteria has become very very strick. I would agree with the future amount being 0%.

But unless you speak directly with the banks, hard to say.

 

[Niner]

The rental market has changed a lot and banks lending criteria has become very very strick. I would agree with the future amount being 0%.

But unless you speak directly with the banks, hard to say.

My experience as well. The problem is that your renters can pack up or not pay at anytime, so you should actually be able to afford your house without the rental income.

 

[supersunbird]

My experience as well. The problem is that your renters can pack up or not pay at anytime, so you should actually be able to afford your house without the rental income.

This! For example if my tenant vanishes or doesn't pay I will scrape by the first month using immediately available savings. By the next month, if I haven't found a new tenant= (I would have got rid of the old one by then ) I can cancel my discretionary investments that are to the value of the bond.

EDIT: and if you wonder why I don't put that extra monthly money into the bond rather than investments? My home loan interest rate is 6.9%, my investment returns are double, triple or quadruple that.

 

[Archer]

My experience as well. The problem is that your renters can pack up or not pay at anytime, so you should actually be able to afford your house without the rental income.

The problem is my current disposable income is more than 30% of my gross (roughly 40%). And banks refuse to go above 30% gross for your monthly payment amount, so I'm hoping to add the rental (which I do not need in any way) to my gross income, not net.

Anyway, friend of mine tells me there is nothing to be done - some part of the credit act forbids the banks to consider future income of any kind. Guess I'll be asking my parents for assistance.